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Zaslav: Discovery in talks over more Amazon-style content deals

Business - 02 Nov 2017

Author: Martin Ross

By Martin Ross

Discovery Communications, the media group that owns Eurosport, is looking to strike more content agreements in the mould of deals signed this year with Amazon, the online retailer.

David Zaslav, Discovery’s president and chief executive, said today that talks have been held with fellow digital giants Google, Facebook and Apple about distribution tie-ups.

Under existing deals in Germany, Austria and the UK, Amazon Prime customers can access content from Eurosport for an additional monthly fee.

Speaking to analysts and investors as Discovery announced its third-quarter results today, Zaslav remarked: “We’re really starting to get some momentum with our strategy of owning IP and being in a position that you can sell that IP in different windows to different distributors.

“In the case of the big four, we’ve never seen in my 30 years in this business distribution platforms like Facebook has (with 2 billion users), like Amazon, Google and Apple. We’re talking to all of them.”

In May, it was announced that Discovery would provide live streams in the UK from its channels and Eurosport Player, the OTT service, in addition to hundreds of hours of video-on-demand and catch-up content from sports events aired by Eurosport.

A deal in Germany and Austria followed in August, as Eurosport’s exclusive live coverage of Friday evening Bundesliga matches was made available to Amazon’s streaming customers, who are being charged €4.99 ($5.83) per month to watch Eurosport Player.

Zaslav continued: “We have deals already with Amazon in the UK, Germany and Austria and they’re quite creative. In those markets we’re going director to consumer with Discovery for €4.99 [per month], we’re selling Eurosport on Amazon and Amazon is selling our [Eurosport] Player in Germany.

“If you look back three years ago those were platforms, [but] today they’re all in the game for IP.

“We think that if Apple wanted to do a deal with one person and offer a family pack everywhere in the world, or if Facebook or Amazon wanted to do that, or if the mobile players wanted to do it in Europe, then who could they go to? There are very few companies. It’s maybe less than three.”

Discovery said that Eurosport Player has enjoyed “solid subscriber growth” since the Bundesliga rights contract kicked in at the start of the season.

Discovery is also launching a joint streaming service in Germany with ProSiebenSat.1, the German commercial broadcaster, as part of a joint venture project.

The service will amalgamate the two media group’s channels, and Zaslav said today that, if the project proves to be successful, then it could be used as a template in other markets.

‘Solid third quarter’ Discovery today announced that third-quarter revenues at its ‘International Networks’ arm rose by 11 per cent to $796 million.

Adjusted OIBDA (operating income before depreciation and amortisation) at the international operation remained flat at $180 million.

Advertising revenue at the international operations jumped by 9 per cent to $298 million, with distribution revenues rising by 13 per cent to $479 million.

Discovery noted: “Distribution revenues, excluding the impact of currency effects, grew nine per cent, mostly due to higher affiliate rates in Europe following further investment in sports content and higher affiliate rates in Latin America, partially offset by lower subscribers in Latin America and lower affiliate rates in Asia.

“Advertising revenues, excluding the impact of currency effects, increased 5 per cent, mostly due to higher ratings in Southern Europe, Latin America, and CEEMEA [Central Eastern Europe Middle East and Africa] and higher pricing in Latin America and CEEMEA.”

Overall, Discovery reported revenues of $1.651 billion in the third quarter, a year-on-year rise of 6 per cent, and group adjusted OIBDA of $575 million, a 5-per-cent upturn.

• Eurosport has been named as the ‘official TV partner’ of the Polish Olympic Committee.

The announcement was made to tie in with the 100-day countdown to the PyeongChang winter Olympics, the first games covered under Eurosport’s €1.3-billion rights agreement across Europe.

The Polish Olympic Committee said that it has established a “strategic partnership to reach a broad audience, including the younger generation.”

It added: “By working with Eurosport, which guarantees a modern and multidimensional approach to broadcasting, it reaches millions of fans in Poland not only on the traditional TV screen, but also through other platforms, social media and official fan zones.”